On 21 December 2019, Emmanuel Macron and Alassane Ouattara stood before the press in Abidjan and announced the end of the CFA franc. A new currency, the eco, was to replace it in June 2020.

Six years later the West African CFA franc trades at 655.957 to the euro — the same rate as in 1999 when the euro arrived, and the same as after the 1994 devaluation, merely expressed in euros rather than francs. On 19 July 2026, at its 69th summit in Lungi, ECOWAS reaffirmed the 2027 target for the eco and dropped the condition that all fifteen members meet the convergence criteria at the same time. Those who qualify go first.

The 2019 reform was real. It removed what could be seen: a deposit in Paris, French seats on the West African central bank's boards, a name. What binds stayed — and the binding part was in no press conference. It is in a decision of the Council of the European Union, and in the interest rate table of a central bank in Yaoundé.

Fourteen countries have nailed their exchange rate to the euro. That means their interest rates must follow the ECB's, and the remuneration on part of their reserves is indexed directly to an ECB rate. None of the fourteen sits on the body that sets it. And the ECB has had it put in writing that it does not stand behind this currency's convertibility.

What that costs in practice can be read off two countries in 2026: in Senegal as a restructuring, in Central Africa as a devaluation debate. The CFA franc is the longest-running field experiment on what a fixed exchange rate costs and what it buys; it turned 80 in December 2025. It is the same mechanics behind every peg, stablecoin and hard-currency debate, only here with eight decades of data and two live stress tests.

The floor: what fell away in 2019 and what stayed

The scope was narrower than coverage suggests. It applied to the West African zone only. In the Central African zone the operations account at the French Treasury still exists, deposit obligation included. At the Central Bank of the Comoros the French government and the Banque de France still supply part of the eight-member board, and the deputy director — responsible for monetary policy — is a Banque de France official.

Banknotes are still printed at Chamalières, at the Banque de France's works, as they have been since 1945. That detail gets quoted as proof of external control, and it is poor evidence for it: the BCEAO and the BEAC place the print orders themselves and decide volume and design; the Banque de France is the contractor. It is a symbol, not a lever. Which is exactly why it belongs here — the CFA franc argument habitually revolves around the symbols and rarely around the levers.

The pattern is precise. What was removed is what is visible. What stayed is what binds.

Where the reserves went

France delivered. Around €5 billion was transferred to the BCEAO after the agreement, the West African operations account was closed, and the BCEAO has been free to invest its reserves wherever it likes ever since.

It still invests them in Europe.

Of the BCEAO's reserves — on the order of $67 billion — 86 to 92 percent sit with European custodians, depending on the asset class. The reason is not compulsion but a house rule: the BCEAO's reserve management framework requires investment-grade counterparties, and that narrows the field to highly rated European institutions.

This is where the common story runs into its limit. Anyone who believed the Paris account was the binding has to explain why the geography of the reserves barely moved after it was closed. The binding was never mainly the account. It is the rate, and everything that follows from it.

In Central Africa you can measure this directly, because the account is still there. At the end of December 2025 the balance of the BEAC operations account stood at CFA3,669 billion, down from 4,877 billion a year earlier. The deposit requirement is 50 percent of foreign assets. What was actually deposited over the year ran at 59.8 to 73.2 percent. The BEAC parks more in Paris than it has to.

Who sets the interest rate

The money in that account is not idle, and the rate on it is the genuinely interesting part.

Remuneration of the operations account is indexed to the European Central Bank's marginal lending facility rate, with a floor of 0.75 percent while the ECB rate sits below that, and a minimum of one percent once it sits above. For as long as the ECB was at zero, the floor was the rate — which is why 0.75 appears in almost every article about the CFA franc. It describes an era that has ended.

What happened since is in the BEAC's books:

The income multiplied within two years and then nearly halved. In neither direction did a government of the zone decide anything, a central bank of the zone resolve anything, or a voter of the zone vote on anything. It was decided in Frankfurt, by a council on which none of the fourteen countries sits.

The same holds for monetary policy itself. A fixed rate to the euro means the zone's interest rates must track the anchor's — otherwise capital moves and the guarantee gets called. When the ECB tightened from 2022, the BCEAO tightened with it; when it eased, the BCEAO cut its main rate from 3.25 to 3.00 percent on 4 March 2026 and held it on 10 June. That can fit. It need not. The West African cycle is not timed from Frankfurt.

And what the ECB is liable for: nothing

Here is the asymmetry that carries the argument.

On 1 December 2020, at the request of the Council of the European Union, the ECB's Governing Council issued Opinion CON/2020/31 on exchange rate matters relating to the CFA franc and the Comorian franc. Council Decision (EU) 2021/357 of 25 January 2021 implemented the result. The finding, unchanged since 1998 and repeatedly reaffirmed:

The convertibility guarantee rests on a budgetary commitment of the French Treasury, not on any commitment by the Banque de France. And the agreements imply no obligation whatsoever for the ECB and the national central banks to support the convertibility of the CFA franc or the Comorian franc. Implementation is a matter for the signatories.

The construction in one sentence: the anchor bears no liability, the guarantor runs no monetary policy, and the users have a vote in neither body.

You can consider that perfectly sensible — a central bank should not stand behind third parties whose budgets it does not control. But the consequence belongs on the page: the peg imports a monetary policy whose author has stated in writing that it will not answer for the consequences inside the zone. When it binds, it binds on the French budget and on fourteen countries. Not in Frankfurt.

Why the fixed rate is the real question

A country that cannot devalue cannot do three things.

It cannot absorb an external shock through the exchange rate — if the cocoa price falls, income falls, and the rate stays where it is. It cannot cheapen its exports. And it cannot erode government debt through inflation.

That last one is where this stops being African regional politics. The established route out of a debt ratio is not growth but nominal growth above the interest rate, and the inflation component does the work. That route is closed inside the franc zone system.

Whether that is a chain or a protection depends on whom you trust with monetary policy. Which is what has been argued about since 1980, when the Cameroonian economist Joseph Tchundjang Pouemi first set out the case.

In 2026 the argument no longer has to be theoretical. There are two live cases.

Case one, Senegal: what happens when you cannot inflate

When Bassirou Diomaye Faye's government opened the books in April 2024, it found liabilities its predecessor had reported to neither parliament nor the IMF — concealed borrowing worth 25.3 percent of GDP. The IMF puts the undisclosed amount at more than $11 billion.

The resulting balance sheet: central government debt stood at CFA23.67 trillion at end-2024, about $42.1 billion — 119 percent of GDP. Add state entities and payment arrears and it reaches 131 to 132 percent.

On 1 September 2026, Senegal and the IMF reached a staff-level agreement on a programme: $2.2 billion over 36 months, covering 2026 to 2029, with restructuring. Executive Board approval is still pending; Senegal must first secure financing assurances from its partners.

And now the sentence this section is about: debt issued in CFA francs stays outside the restructuring. That is close to a third of official debt. The haircut falls on external creditors — roughly half the external debt is owed to multilateral institutions and governments, the other half to commercial creditors, including over $7 billion in international bonds.

That is the exact inverse of the normal case. A country with its own printing press erodes its domestic-currency debt and services the foreign-currency debt — or tries to. A country inside a peg cannot erode its domestic-currency debt, because that debt is effectively foreign currency. So it gets protected and the rest gets negotiated.

What the peg delivers here is real: CFA debt is treated as safe, which holds down yields and keeps the regional market open. What it costs is equally real: at 119 percent of GDP there is no quiet way out. There is austerity, restructuring, or both. The peg did not create the debt — a government that hid it did. The peg determines how you get back out.

Case two, Central Africa: the devaluation question is back

In CEMAC the picture is different, and worse.

BEAC foreign exchange reserves fell 12.5 percent in 2025. Import cover runs at roughly 4.1 to 4.5 months — below the five months the IMF treats as comfortable, and the BEAC itself expects about 4.52 months for 2026. At the end of June 2026 the zone's reserves stood at CFA7,248 billion, about $12.62 billion.

On 7 May 2026, David Cowan, Citigroup's chief economist for Africa, published a note calling a devaluation of the Central African CFA franc the core of the current CEMAC question: it would support competitiveness, halt the erosion of reserves and ease debt pressure. The BEAC pushed back immediately. Governor Yvon Sana Bangui had already said in April that the CFA franc was not under threat and that devaluation rumours were entirely unfounded.

Behind this runs a fight over money that is not in the zone at all. The BEAC requires oil, gas and mining companies to hold their provisions for future site restoration — the so-called RES funds, estimated at around CFA6 trillion, some $5 to $10 billion — at the central bank rather than with foreign banks. That is roughly the size of the zone's entire reserves. In parallel, the repatriation ratio for extractive export revenues rises from 35 percent today to 50 percent on 1 January 2027 and 70 percent on 1 January 2028. US legislators have tried to tie IMF resources for CEMAC states to the dispute.

For testing announcements this is the most instructive part of the case: in 1994 the devaluation was denied until shortly before it happened. A denial is not a data point. The reserves are one.

Two zones, one rate, opposite situations — West Africa with solid numbers, Central Africa under reserve pressure. That too belongs in the balance of a shared anchor: it is the same for both, whether or not it suits both.

The trigger in the Sahel was an event, not a resentment

On 9 January 2022, an extraordinary ECOWAS summit in Accra, together with WAEMU, imposed sanctions on Mali after the military government pushed back the agreed election date. Members' land and air borders with Mali were closed, non-essential financial transactions were suspended, and Malian state assets in the region's central and commercial banks were frozen — including at the BCEAO.

That demonstrated in practice what had been theoretical: the regional banking system can be switched off remotely. From that date, leaving the currency zone stopped being an ideological question for Sahelian governments and became one of capacity to act.

Exit has been declared policy of the Alliance of Sahel States since. Mali, Burkina Faso and Niger have torn up military agreements, expelled French troops and left ECOWAS in January 2025. On 28 March 2025 they introduced a confederal import levy of 0.5 percent on goods entering from outside the union. On 23 December 2025 in Bamako they activated the Confederal Investment and Development Bank, BCID-AES, with capital of CFA500 billion, roughly $820 to $900 million.

A currency of their own has been announced. No institution for it exists, no date has been set, and even the name is contested: the documents said "Sahel", reporting circulates "Sira", and the widespread claims that a gold-backed digital currency has already been introduced come from sources that do not survive checking — a fact-check rates them false.

And what is holding them back

They still use the CFA franc.

Not by accident. The three states had two bindings and cut one of them: they left ECOWAS and stayed in WAEMU — with its common currency, its central bank, its banking supervisor, its regional financial market and its exchange. Which of the two bindings was harder, they answered themselves.

The trade structure explains why. Burkina Faso and Mali are among the few countries in the union for which imports from within the union make up more than a fifth of all imports; for Mali, 48 percent of total trade was with the African continent. Border closures and new customs checks hit livestock, cereals and re-export trade first — the goods Sahelian livelihoods depend on.

Then the scale: together the three account for an economy of just under $70 billion with over 75 million people, and for roughly seven to eight percent of ECOWAS GDP, depending on source and reference year. A currency is an institution, and institutions require time, capacity and trust. Leaving a peg is the easy part. The hard part comes afterwards.

Three tests of the opposing case

The defence of the CFA franc is that it delivers what it promises. Low inflation, reliable convertibility, a stable framework. That is not an excuse, it is a checkable claim — and it holds further than a critic would like.

First, the long-run evidence supports it. Over long horizons, inflation in the franc zone runs far below the rest of sub-Saharan Africa. For the decade 2013–2022, the zone's fifteen countries are reported at 1.9 percent annual price growth against 15.1 percent for the rest of sub-Saharan Africa; for 2014–2023 the figures are 2.2 percent for the CFA zone against 17.2 percent.

Two qualifications belong immediately alongside. The decade figures come from CERMF, a research centre openly sympathetic to the francophone countries — not a neutral arbiter. And the comparison group "rest of sub-Saharan Africa" contains war and hyperinflation economies; part of the gap measures their situation, not the peg.

The direction is not in dispute nonetheless. The IMF's franc zone literature and a BIS study of exchange rate regimes reach the same result for 1960 to 2004: membership of the zone was an advantage in limiting inflation. The mechanism is unspectacular — under a fixed rate and without exchange restrictions, excess demand discharges mostly into the external account rather than into prices.

Second, the current picture supports it too. WAEMU inflation averaged 0.0 percent in 2025 and stood at 0.8 percent in June 2026. Ghana recorded 5.0 percent in August 2026, its second consecutive rise after 4.6 percent in July.

The old counterexample no longer holds. Niger, a CFA member, did record high inflation in 2024 — the consequence of border closure and sanctions after the coup. Once those ended it flipped: −4.7 percent in 2025, −10.2 percent in January 2026 and −9.8 percent in March 2026. The consumer price index fell from 108.8 to 98.1 points, driven by food (−18.7 %), including cereals (−30.7 %) and vegetable oils (−24.1 %).

Anyone turning that into a success for the peg stopped reading too early. Double-digit deflation is not a price-stability result but a normalisation after a blockade — and if it sets in, it is the most expensive price environment a debtor can have: the debt stays nominal, the income falls. What works against deflation is precisely the set of instruments a pegged country has given up. For 2026 the BCEAO expects 2.2 percent union-wide.

Third, the growth question is open. WAEMU grew 6.7 percent in 2025 after 6.2 percent the year before; 6.1 percent is expected for 2026. Those are not stagnation numbers. At the same time, Ghana attracted considerably more foreign direct investment before its inflation crisis than any country in the zone, and CEMAC sits in the same currency area with falling reserves. Whether stability here enables growth or masks stagnation is not settled by the available data — and anyone claiming it is settled has picked a side.

The strongest counter-argument

Two objections come to mind, and both deserve an answer.

First: you present this as France retaining control. In fact, on the French account, continuation of the reforms depends solely on the sovereignty of the states using the currency, and Ouattara, who co-announced the reform, is an outspoken supporter of it. Both are true and belong here. Nobody is in the zone because they were tricked. The governments with the power to leave mostly benefit from the arrangement — convertibility without exchange rate risk is a concrete advantage for elites holding assets abroad. That is the less flattering explanation than external compulsion, and probably the more accurate one. That the question is nonetheless live shows in Ivorian opposition figure Tidjane Thiam, who put it in 2025 that a nation without control of its currency is not truly sovereign — and in Senegal under Faye, which has made its distance from the current arrangement an open subject.

Second: if the peg were so damaging it would be gone by now. That assumes currency regimes are selected for their usefulness to populations. They are selected for their usefulness to decision-makers. The Sahel shows both at once: governments that made exit policy, and a trade network that makes exit expensive. That they stayed proves nothing about the quality of the system, only something about its switching costs.

What to do with this

The CFA franc is the longest-running field experiment on what a currency peg costs and what it buys. Fourteen countries, two zones, since 1945.

The balance is not a headline:

• It delivers imported price stability — 1.9 percent annual inflation over the decade against 15.1 percent in the rest of sub-Saharan Africa, 0.0 percent in WAEMU in 2025 against 5.0 percent in Ghana in August 2026 — and a convertibility that keeps Senegal's CFA debt out of a restructuring even at 119 percent of GDP.
• It takes three instruments in exchange: shock absorption, export cheapening, and the erosion of debt through inflation. A country with too much debt negotiates instead of printing.
• It moves the interest rate decision to where the affected have no vote — and the anchor has put in writing that it does not answer for the consequences.

Anyone who counts the third loss as a loss should remember that countries with their own printing press use that instrument regularly. Anyone who counts it as a gain should look at Senegal's calendar.

For checking announcements, the case is unusually good, because there is a number here that requires no interpretation. The rate reads 655.957. It read that in 2019 when the end was announced. It reads that today, after three governments expelled troops, tore up treaties and left an alliance. That is the usable habit: for any currency announcement, first ask which number would have to move if it were true — then go and look whether it moved.

The open question is the one Pouemi asked in 1980 and nobody has answered since: what would a monetary institution look like that is run by African central banks, calibrated to African development conditions, and accountable to African populations? So far the eco has not been the answer. Whether it becomes one from 2027 will be decided by convergence criteria, not by speeches.

FAQ

Was the CFA franc abolished or not? No. What was announced in 2019 was replacement by the eco from June 2020. In West Africa the CFA franc continues, and in Central Africa it was never in question. On 19 July 2026 ECOWAS reaffirmed the 2027 target, this time as a staged start: those who meet the criteria begin, the others join later.

What did the reform change, then? Two concrete things in the West African zone: the obligation to deposit half of foreign reserves with the French Treasury ended — about €5 billion flowed back — and French representatives withdrew from the BCEAO's governing bodies. The rate and the convertibility guarantee stayed. In Central Africa the operations account remains.

Are the reserves in Africa now? Mostly not. 86 to 92 percent of BCEAO reserves still sit with European custodians, depending on the asset class. That is not a requirement of the agreement but a consequence of its own investment framework, which demands investment-grade counterparties.

What has the ECB got to do with it? Two things. The euro peg forces the zone's central banks to follow ECB policy; the BCEAO cut to 3.00 percent on 4 March 2026 and held on 10 June. And remuneration of the Central African operations account is indexed to the ECB's marginal lending rate — which is why BEAC interest income fell to CFA110.6 billion in 2025, down 42 percent. The ECB takes on no liability for any of it: Council Decision (EU) 2021/357 records that the agreements imply no obligation for the ECB or the national central banks to support convertibility.

Is it true the reserves only earn 0.75 percent? That was once the case and is now the floor, not the rate. Remuneration follows the ECB's marginal lending rate: 4.38 percent on average in 2024, between 2.40 and 3.19 percent by quarterly average in 2025.

Why does the fixed rate matter so much? Because it rules out three instruments: devaluation as a buffer against external shocks, cheapening one's own exports, and eroding government debt through inflation. Senegal shows in 2026 what comes instead: $2.2 billion from the IMF, restructuring — and CFA-denominated debt explicitly outside that restructuring.

So the peg delivers nothing? It does, and the current picture supports it more strongly than the picture from two years ago: WAEMU inflation 0.0 percent in 2025, Ghana 5.0 percent in August 2026. The price sits on the other side: in Central Africa reserves fell 12.5 percent in 2025, and the devaluation question is back on the table — even though the BEAC rejects it.

Why don't the Sahel states just leave? Because they had two bindings and cut the other one. They left ECOWAS, founded their own investment bank with CFA500 billion — and stayed in the monetary union, central bank, banking supervision, regional market and exchange included. That answers the question of which binding is harder.

Is this an argument for Bitcoin? The piece makes none — it hands you the mechanics of a peg: what it costs, what it buys, who sets the interest rate, and how to tell whether a currency announcement changed anything. Which instruments you apply that test to is up to you.

---

Not investment advice, not a recommendation, not a forecast. Historical patterns are no promise for the future.

Study the Past — Improve your Future 🥋